Coe v. Portland Farmers' Elevator Co.

• Decision Date: 22 July 1926
• Docket Number: No. 144.,144.
• Citation: 209 N.W. 829,236 Mich. 34
• Parties: COE v. PORTLAND FARMERS' ELEVATOR CO.
• Court: Michigan Supreme Court

236 Mich. 34

209 N.W. 829

COE

v.PORTLAND FARMERS' ELEVATOR CO.

No. 144.

Supreme Court of Michigan.

July 22, 1926.

Error to Circuit Court, Ionia County; Royal A. Hawley, Judge.

Action by Floy N. Coe, individually and as administratrix of the estate of Eliza Coe, deceased, against the Portland Farmers' Elevator Company. Judgment for plaintiff, and defendant brings error. Affirmed.

Argued before the Entire Bench.

Glenn D. Mathews, of Ionia, for appellant.

Eldred & Gemuend, of Ionia, for appellee.

SNOW, J.

The defendant is a Michigan corporation, and on or about October 23, 1920, it sold to plaintiffs $1,100 of its capital stock, without first having applied to the Michigan securities commission for, or having obtained, permission to make such sale, under sections 11945 to 11969 of the Compiled Laws for 1915.

Section 11958 provides:

‘It shall be unlawful for any investment company or dealer, or representative thereof, either directly or indirectly, to sell or cause to be sold, offer for sale, take subscriptions for, or negotiate for the sale in any manner whatever in this state, any stocks bonds or other securities (except as expressly exempted herein), unless and until said commission has approved thereof and issued its certificate in accordance with the provisions of this act.’

Section 11967 provides:

‘Any person or persons who shall violate any of the provisions of this act shall be deemed guilty of a misdemeanor. * * *’

This act, commonly known as the ‘Blue Sky Law,’ was amended in 1921, and repealed in 1923 by P. A. No. 220. It was, however, in force when the sale of stock in the instant case was made, but had been repealed when action to recover the amount paid for the stock was commenced, which was in July, 1925.

The facts are not in dispute, but defendant contends that the repeal of the 1915 statute had the effect of abolishing plaintiff's cause of action, which is particularly evidenced by the following saving clause in the 1923 Act (Acts 1923, p. 346, § 1), viz.:

‘All proceedings pending before said Michigan securities commission created by said Act No. 46 of the P. A. of 1915, by virtue of any law of this state, shall be continued by the commission created by this act; all actions, civil and criminal, pending under said act, shall be continued and completed thereunder; and all securities, approved by the Michigan securities commission under Act No. 46 of the P. A. of 1915, shall be legally salable unless otherwise ordered by the commission created under this act.’ Section 33, Act No. 220, P. A. 1923.

This is the only question in the case. The sale of the stock to plaintiffs in the first instance was admittedly unlawful. Section 11958, C. L. 1915; Edward v. Ioor, 205 Mich. 617, at page 624, 172 N. W. 620, 15 A. L. R. 256;Farm Products Co. v. Jordan, 229 Mich. 235, 201 N. W. 198.

Plaintiffs had the right to rescind the contract of purchase and recover their money...